Bank Of Japan Sets Major Stimulus; Nikkei Up 2.2%

Japan is making a sweeping shift in its monetary policy, aiming to spur inflation and get the world's third-largest economy out of a long, debilitating slump.

Bowing to demands from Prime Minister Shinzo Abe for more aggressive monetary easing, the Bank of Japan announced Thursday a policy overhaul intended to double the money supply and achieve a 2% inflation target at the "earliest possible time, with a time horizon of about two years."

BOJ governor Haruhiko Kuroda described the scale of monetary stimulus as "large beyond reason," but said the inflation target would remain out of reach if the central bank stuck to incremental steps.

"We'll adjust without hesitation if need be, while monitoring economic and price conditions," he said.

The BOJ is joining the U.S. Federal Reserve and other major central banks in soaking the economy in money in hopes of getting corporations and consumers to begin spending more in a virtuous cycle that would put growth back on track after two decades of malaise.

The central bank said it intended to "drastically change the expectations of markets and economic entities."

Financial markets, which had feared Kuroda might not live up to expectation for bold steps, reacted with relief. The Japanese yen, which was trading at about 92.8 yen per U.S. dollar, dropped to about 95.5 yen per dollar after the announcement. The benchmark Nikkei 225 stock index rebounded from negative territory to close 2.2% higher.

"By committing today to meet a 2% inflation target in two years, Gov. Kuroda can justifiably claim to have set the Bank of Japan on a new path," said Mark Williams of Capital Economics.

"But while markets have welcomed the announcement, the credibility of this pledge is soon likely to be called into question," he said in a commentary.

Kuroda has pledged to do what he must to meet the inflation target within two years. Thursday's decision after a two-day policy meeting makes that central bank policy.

Signaling a consensus behind Kuroda, most items agreed upon received unanimous support from the nine-member board.

The policy shift is a coup for Abe, whose Liberal Democratic Party needs to make headway in reviving the economy before an upper house parliamentary election in July.

The LDP is hoping for a strong enough mandate to push ahead with other items on their wish list, such as politically difficult economic and educational reforms and changes to the constitution to give Japan's military a higher profile.

Japan is making a sweeping shift in its monetary policy, aiming to spur inflation and get the world's third-largest economy out of a long, debilitating slump.

Bowing to demands from Prime Minister Shinzo Abe for more aggressive monetary easing, the Bank of Japan announced Thursday a policy overhaul intended to double the money supply and achieve a 2% inflation target at the "earliest possible time, with a time horizon of about two years."

BOJ governor Haruhiko Kuroda described the scale of monetary stimulus as "large beyond reason," but said the inflation target would remain out of reach if the central bank stuck to incremental steps.

"We'll adjust without hesitation if need be, while monitoring economic and price conditions," he said.

The BOJ is joining the U.S. Federal Reserve and other major central banks in soaking the economy in money in hopes of getting corporations and consumers to begin spending more in a virtuous cycle that would put growth back on track after two decades of malaise.

The central bank said it intended to "drastically change the expectations of markets and economic entities."

Financial markets, which had feared Kuroda might not live up to expectation for bold steps, reacted with relief. The Japanese yen, which was trading at about 92.8 yen per U.S. dollar, dropped to about 95.5 yen per dollar after the announcement. The benchmark Nikkei 225 stock index rebounded from negative territory to close 2.2% higher.

"By committing today to meet a 2% inflation target in two years, Gov. Kuroda can justifiably claim to have set the Bank of Japan on a new path," said Mark Williams of Capital Economics.

"But while markets have welcomed the announcement, the credibility of this pledge is soon likely to be called into question," he said in a commentary.

Kuroda has pledged to do what he must to meet the inflation target within two years. Thursday's decision after a two-day policy meeting makes that central bank policy.

Signaling a consensus behind Kuroda, most items agreed upon received unanimous support from the nine-member board.

The policy shift is a coup for Abe, whose Liberal Democratic Party needs to make headway in reviving the economy before an upper house parliamentary election in July.

The LDP is hoping for a strong enough mandate to push ahead with other items on their wish list, such as politically difficult economic and educational reforms and changes to the constitution to give Japan's military a higher profile.

News swarmed out of India this week as the country prepares for Saturday's first full-year budget presentation from Prime Minister Narendra Modi. The Bombay Stock Exchange's benchmark Sensex index slipped 1.6% for the week through Thursday, but remained up 4.5% year to date. The index rallied 30% ...

Israel-based stocks were in motion Wednesday, as SodaStream International dived 9%, CyberArk was flat and Mobileye geared up to report results before Thursday's open. Israel has an annual GDP between that of Singapore and Chile yet has one of the world's most developed economies. It muscled through ...

London's benchmark FTSE 100 index edged up to a new high Tuesday, topping its previous peak from December 1999. That left the gauge up 5.8% so far this year, rebounding after a volatile fourth quarter. The performance lags far behind Frankfurt's DAX, up 14.2% year-to-date, and Paris' CAC-40, with a ...

Some sizable international stocks are set to weigh in with earnings reports this week, with names including Bayer (OTCPK:BAYRY), BASF (OTCPK:BASFY) and Airbus Group (OTCPK:EADSY) on the reporting calendar. Reports from international leaders in actionable chart situations are a little harder to ...

Select market data is provided by Interactive Data Corp. Real Time Services. Price and Volume data is delayed 20 minutes unless otherwise noted, is believed accurate but is not warranted or guaranteed by Interactive Data Corp. Real Time Services and is subject to Interactive Data Corp. Real Time Services terms. All times are Eastern United States. *Reflects real-time index prices.